Accountability at the heart of the new food safety law

August 30, 2011
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by Keith Nunes

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COLORADO SPRINGS, COLO. — As development and implementation of the Food Safety Modernization Act progresses, Joseph A. Levitt, a partner in the Washington, D.C., law firm Hogan Lovells U.S., urged members of the Grocery Manufacturers Association to avoid complacency and begin preparing for the requirements of the new law. Mr. Levitt spoke during the G.M.A.’s Executive Conference, held in late August at The Broadmoor hotel in Colorado Springs.

“This law is fundamentally a good law,” he said. “It is something that is and should be embraced by the food industry, and it will ultimately enhance the safety of the food supply. The biggest danger any food company can place themselves in is to be complacent. Anyone who thinks they have always done a good job and they are going to be fine is making a mistake.”

Noting that many aspects of the F.S.M.A. have been discussed at length since the passage of the law in January, Mr. Levitt chose to focus on portions of the law he considered to be less well understood by food manufacturers, specifically those portions of the F.S.M.A. that relate to accountability.

“This law is the most significant law in food safety that is happening in our lifetimes,” he said. “It is going to be a big, big change.”

While records access during inspections is not new to the drug or medical device industries, Mr. Levitt called the practice a “whole new world to the food industry.”

“This is going to be more like a tax audit than an F.D.A. inspection,” he said. “They (F.D.A.) are going to know what you did, when you did it and how you reacted. They will want to see your corrective action files, they are going to want to see your HACCP plans, and they are going to want to see the justification for your HACCP plans.”

Mr. Levitt encouraged audience members to go back to their companies and ensure their company’s records are organized.

“If an inspector came in and said ‘I want to see your corrective actions for the last two years,’ could you produce them? Do you even know where they are? After you find them, read them yourself. What do they look like? Are they comprehensive, are they complete?”

Adding that the F.S.M.A. is about prevention and documenting prevention, Mr. Levitt said the requirement for companies to scientifically verify their procedures and actions will take accountability to a whole new level.

It is not just their own actions that food and beverage companies will be accountable for once the F.S.M.A. is fully enacted. Companies also will be accountable for the procedures and programs used by their suppliers.

“You all have a document system in place that shows you are providing oversight of your suppliers; that they are doing what they are supposed to be doing,” Mr. Levitt said.

He added that for industry suppliers the responsibility is going to be exactly the opposite. They will be required to show prospective customers that they have adequate systems in place to assure the quality of their products.

Calling F.D.A. enforcement actions “clubs,” Mr. Levitt said the F.S.M.A. gives the agency several new ones.

“While mandatory recall gets all of the attention, nobody in this room is going to be subject to a mandatory recall, because you will have the opportunity to do a recall voluntarily,” he said. “That is the way it has always been. I am not worried about mandatory recall. What you should be worried about is the (F.D.A.’s) ability to suspend your registration.”

Officials with the Department of Homeland Security realized as they were attempting to assess credible threats to the United States’ infrastructure that in order to establish adequate food defense plans they would need to know where food is manufactured. As a result, all companies that manufactured food and beverages were required to register. Now that registration is a license to do business under new powers granted to the F.D.A. through the F.S.M.A., Mr. Levitt said.

“The F.D.A. can yank that license, and once they yank that license you are out of business that day,” Mr. Levitt said. “Now it is an extraordinary power and there are safeguards in the law. It can only be used if it is an overt safety hazard that is equivalent to a Class I recall, which doesn’t happen very often. Procedurally, it can only be done by the commissioner, which means there are many checks along the way before an issue reaches that point. But nevertheless it is an extraordinary power.

“I don’t expect to see it (used) a lot, but someone is going to get it, and you don’t want it to be you.”

Noting that it is good news there are no civil penalties included in the F.S.M.A., Mr. Levitt said there are fees included that may have a significant impact on some companies.

“The new rule is the first inspection is on Uncle Sam and the second inspection is on you,” he said. “So your goal is to never have a second inspection caused by the first. It is very simple.”

The re-inspection process will be triggered if, during the initial inspection, the F.D.A. finds issues that require official action. The F.D.A. recently published a notice that stated its fee schedule will include an hourly rate of $225 per hour.

“It is not uncommon for F.D.A. to send in a team and it is not uncommon for them to take four or five days,” Mr. Levitt said. “It is always common for them to have to travel there and back. If they have to take samples they will send them to the lab. Those lab people work by the same hourly rate.

“Well, if you just do the math for a week of four people for five days that is $28,000. Add in the lab time and you are adding $10,000, $15,000 or $20,000. So for a re-inspection you could suddenly find yourself with a $25,000 to $50,000 bill.”

General Mills, Batter Blaster win G.M.A. innovation awards

COLORADO SPRINGS, COLO. — General Mills, Inc. and Batter Blaster received the 2011 C.P.G. Award for Innovation and Creativity from the Grocery Manufacturers Association and its Associate Member Council. The award, which was presented at the 2011 G.M.A. Executive Conference held at The Broadmoor hotel in Colorado Springs, is given annually to companies that have demonstrated creativity, innovation, and have made a significant impact on the industry knowledge base.

“This award celebrates industry creativity and innovation, and these winners have proven to be exemplary in both,” said Pamela G. Bailey, president and chief executive officer of the G.M.A. “General Mills and Batter Blaster have found creative ways to provide consumers with healthier, more sustainable products at a time when consumers are demanding both innovation and value during today’s challenging economy.”

The G.M.A. said it received a record number of entries and evaluated applications in two manufacturer divisions — those from companies with total sales of less than $3 billion and those from companies with $3 billion or more in sales.

Burning oat hulls

Minneapolis-based General Mills received the award for companies with $3 billion or more in sales for the development, launch and use of its oat hulls biomass burner at its Fridley, Minn., facility The biomass unit burns oat hulls left over from the milling process to produce about 90% of the steam needed to heat the plant and produce oat flour used in making Cheerios and other products. According to the G.M.A., the burner nearly eliminated the need for natural gas at the plant for steam and heat beginning in December 2010.

“Our biomass burner addressed two compelling business needs — saving money and reducing our footprint on the environment for years to come,” said Ken Powell, chairman and c.e.o. of General Mills. “We’ve sharpened our focus on building sustainability into every step, from seed to spoon, and this project is one of the most recent and visible successes from

this journey. Accomplishments such as the biomass burner inspire and challenge all General Mills employees to dream big when developing creative solutions to make General Mills an even more sustainable company.”

John Hellweg, manufacturing manager at the Fridley facility, said that almost a third of the oats General Mills take in end up as hulls and that the company has spent many years trying to determine the best use for them.

“We went through a whole line of ideas in getting from there to here,” he said. “We looked at plastics, other agriculture uses and its use as a feed stuff. But they never had too much value until the price of energy started to go up.”

Through testing General Mills learned that oat hulls have a high BTU value, almost as high as bituminous coal.

“We started looking at how we can use oat hulls as an energy source to replace natural gas in the refining industry,” Mr. Hellweg said. “It is used by a steel company here in Minnesota and we started working with them, but shipping costs were high. Then we started looking at (natural) gas costs in Fridley.”

As with any innovation, the back story is complicated. A lot of infrastructure work went into developing the biomass burner and integrating it into the Fridley facility’s energy supply system, Mr. Hellweg said.

“We had to look at things like emissions permitting, we had to tie the biomass system into the present steam system and integrate it with our natural gas system,” he said.

The capital outlay for the biomass burner was $3.3 million, according to General Mills, and, as a result, the only natural gas the company uses at the facility is when the biomass burner is shut down for inspection and maintenance, which occurs once per year.

Pancake batter in a can

Based in Austin, Texas, and founded in 2007, Batter Blaster won the award for companies with total sales of less than $3 billion with Batter Blaster’s Organic Original Pancake and Waffle Batter. The product, served in a patent-pending, pressurized can, has changed the morning breakfast routine for families across the board, the G.M.A. said.

“We’ve certainly learned that innovation takes guts — it’s not the path of least resistance,” said Sean O’Connor, founder and c.e.o. of Batter Blaster. “It requires massive changes in consumer behavior and the education and awareness to gain that mindshare. But innovation can change even the oldest of categories. Ready-made pancake mix has been around since 1889. Batter Blaster is still shaking up that category more than 120 years later, adding new consumers and growth to a typically traditional category.”

Speaking with Food Business News, Mr. O’Connor elaborated on some of the additional challenges small companies face trying to gain traction in the food and beverage marketplace.

“If you look at developed categories you would find that successful brands ended up growing by virtue of a big guy kind of pulling the category, and they (smaller companies) differentiate themselves with some kind of additional value proposition,” he said. “The challenge for Batter Blaster is when you are truly innovative you are going it alone. There is nobody else to carry the marketing budget.

“Then there is the education and awareness piece that reaches from the retailer to the consumer. I challenge you to go to your local retailer and ask him if he has heard of Batter Blaster. That, in and of itself, is a challenge, because if the guy stocking the shelves has never heard of you then you run into problems of selling out and never being restocked.”

To enhance awareness, the company is in the process of launching new flavors coast-to-coast that include whole wheat with brown sugar and cinnamon, buttermilk and double chocolate. Mr. O’Connor said the company also may experiment with developing seasonal packaging and flavors.

“We have a ton of flavors we are working on,” he said. “In addition we are looking at other applications such as cupcakes and brownies. Imagine how easy it would be to make cupcakes and just spray the batter into the cupcake tin? That’s the stuff we continue to pursue with R.&D.”

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